A new government for Victoria, now a new approached needed on the Budget - AM Agenda

Posted by Andrew Leigh Mp48sc on December 01, 2014

As the start of December brings a new Labor government for Victoria, I joined Sky AM Agenda to talk about what lessons the federal Liberals should be taking from the defeat of their state counterparts, starting with their unfair budget.

KIERAN GILBERT: This is AM Agenda, thanks for your company this Monday. With me is the Coalition frontbencher Darren Chester and Labor's Andrew Leigh, the Shadow Assistant treasurer. Gentlemen, good morning to you both. Let's start with the Victorian election again. As a Victorian, Darren, you've said that some federal issues were at play over the weekend?

DARREN CHESTER, MEMBER FOR GIPPSLAND: It is a disappointing result for the Coalition and you need to be a realist in these situations. It was quite a tough environment in Victoria and some of the federal issues were playing into that. I think primarily it was a campaign fought on some pretty tough state issues for the government. The TAFE issue, ambulance pay, the Geoff Shaw disfunctionality that surrounded the parliament there for a couple of months, that made it very hard for Denis Napthine and Peter Ryan to get a clear message out. There's always more than one issue that plays into an election. I think there's no doubt that the tough budget decisions we had to make, and continue to try and implement, have had some impact but I wouldn't overstate that.

GILBERT: So there is some impact beyond that? Are there lessons to be learned? I asked Sharman Stone about that earlier - she was pretty clear on a few things that needed to be taken out of it.

CHESTER: From a campaign perspective I think there's some big lessons for the Coalition to learn. I think our campaign went quite badly during the whole campaign period, you've got to give credit to your opponent in these situations. You can drop your bundle, you can sulk about it or you can pick up your bundle and get on with the job, we've got to get on with the job. We've got to get on with the job of being a strong opposition, learning from our mistakes in the campaign. The Nationals have lost one seat and maybe another one in jeopardy.

GILBERT: Tony Abbott wasn't in Victoria at all for the last week of the campaign, I think he made one appearance, possibly two. But there was a very light profile in terms of his presence, why is that?

CHESTER: Well he had a very high profile thanks to the Labor Party. I mean, they were promoting Tony every day. Tony was part of the campaign in the sense that the Liberal Party promoted him and the Labor Party tried to put an alternative view of him. There's nothing unusual about that, in previous campaigns we've used Julia Gillard to good effect to diminish the Labor Party vote in Queensland and other places.

GILBERT: It shows you're struggling in terms of popularity?

CHESTER: It shows political parties do their research and try and make a villain out of someone if it helps their case. That's what the Labor Party was trying to do, and in reverse, we were making our case that Daniel Andrews is too close to the CFMEU. That’s the real fear I have, that the union influence on this new government won't be good for jobs in Victoria. So our challenge is to make sure it's a one-term government because I think Daniel Andrews will do enough damage in four years.

GILBERT: Are you worried, Andrew Leigh, about the fact that this new Labor leader is going to start by tearing up contracts on a big infrastructure project? That's not great for Labor's economic credibility more broadly, is it?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, I'm confident that Daniel Andrews will be a positive Premier, just as he ran a positive campaign. On the East West Link, it's very clear that we still don't have a cost benefit study – unlike the Melbourne Metro which had a strong cost benefit result, ranked higher by Infrastructure Australia than the East West Link. On the question of federal implications, naturally federal politicians have a 'dog in the fight' so I'd turn to Jeff Kennett and Steve Bracks, both of whom clearly say that Tony Abbott shirt-fronted his Victorian colleagues with the backdoor fuel tax at the start of the campaign and again at the end of the campaign by refusing to back off the unfair GP Tax. Now as Darren has noted, Tony Abbott was being campaigned for in Labor ads not Liberal ads because he's about as popular as a fruit fly plague in Victoria.

GILBERT: My colleague Jim Middleton this morning in Melbourne said that a Liberal MP had said to him ‘the Feds did us over’? Is that the view among the state MPs?

CHESTER: Andrew is trying to pretend that it was a positive campaign. That's like me telling you I had a shave this morning! I mean realistically, the Labor Party ran a negative campaign the whole way through but it was effective. I’ll give them credit for that effective, negative campaign. In terms of the Victorian Coalition you can look around, look interstate for reasons that we got done, but I'm a Victorian and I'm prepared to look in the mirror and say we made a few boos in our campaigns in the National Party, we've got to learn from the mistakes we made. There's no point of having the Night of Long Knives and talking about what we did wrong and trying to square up with our colleagues interstate. Just accept you ran a bad campaign, there a whole range of factors at play, both state and federal. They've got to pick their bundle up and get on with the job.

GILBERT: Just finally, Andrew?

LEIGH: On the positive campaign, I'd point to Daniel Andrews’ pledges on fixing up level crossings, on making sure that ambulances got there on time and the positive plans for schools. He'll be a positive Premier that won't be stood over by the Prime Minister and will be a great leader for the people of Victoria for many years to come.

GILBERT: Let's move on and I want to ask you about this report by Deloitte Access Economics which shows that the budget situation is deteriorating even further. The mid-year economic update is likely to show a $35 billion worsening of the budget position. Now, Chris Richardson also says the budget is the only roadmap to structural repair Australia has. The Opposition and minor parties have washed their hands of offering detailed alternatives, preferring populist posturing. Pretty scathing, in terms of his assessment of Labor's approach to budget responsibility?

LEIGH: I've got a lot of respect for Chris Richardson but I think that's an unfair critique. Labor has been very clear that we think the Government could have gotten more revenue from keeping the carbon price and mining tax, from maintaining fair taxation of multinationals – let's not forget they've given a billion dollars to multinationals – and fair taxation of people with millions of dollars in their superannuation account. It was only last year when Joe Hockey was saying that a Coalition Government would deliver surplus budgets in their first year and every year after that. Saying that Australia had no revenue problem and saying that Labor was simply bleating when it complained about iron ore prices. So Mr Abbott and Mr Hockey can't have it both ways. They can't be out there saying that they will deliver a surplus budget and then turn around after the election and start attacking the media for not cheerleading, the Opposition for opposing and the business community for not barracking.

GILBERT: Well if you've got this situation, Darren Chester, half the budget measures being blocked in the Senate as they are, you would still be in a situation where the deficit was worsening here, regardless of the $30 billion facing the block in the Senate. You can bag Labor but there’s still that deterioration as Andrew says. That's a reality and far from returning to surplus in four years, it's going to be deficits for as far as the eye can see.

CHESTER: Andrew is the economist, I'm just a simple country bloke. But what I understand is, if you're spending more money than you're getting in and you keep doing that year after year like Labor did, one day there's a day of reckoning. And we're saying the day of reckoning is now, we're trying to fix up Labor's mess. For me it's pretty simple arithmetic, we need to stop spending more than we're earning and that's a problem for the government, it's a structural problem built into the budget and it's something we inherited from the Labor Party. The Australian people gave us the responsibility, they gave us a very tough job to do. They knew we were going to make some tough decisions. We need to get better at explaining why we're doing it and how we're doing it, but at the end of the day if we don't make these changes the problems are only going to be worse and they'll be harder to fix.

GILBERT: But what needs to be done? You said you need to get better at it – what needs to be done?

CHESTER: Absolutely we need to get better at it. You had Sharman Stone on your program just before, explaining we need to be talking to people more in plain language and reflecting we understand some of the challenges they are going through, and making it clear we have a plan for the future. Right now, all Bill Shorten has is a bunch of punch lines and some puns, pretty bad puns most of the time too. He has no policies for the future, he comes up with these clever lines but he should spend more time coming up with policies than clever one-liners and get on with the job of being a credible Opposition leader with a credible alternative plan. There's only one plan on the table and that's our plan and we're trying to implement it.

GILBERT: I guess beyond the very strong criticism of Chris Richardson towards the crossbench and Labor in terms of the ‘political posturing’ as he put it, the fundamental point that he makes is that there's got to be some structural shift. As an economist, you know that there's a structural imbalance in our budget in terms of what Darren is talking about, the money going out. Certainly in the medium to longer term, which Government is going to be able to do this? Obviously it's going to be very difficult, surely Labor recognises that those changes need to happen.

LEIGH: When the Government came to office, it came to office with a projected $24 billion deficit for the current financial year. Current reports suggest that when Joe Hockey brings down his mini budget, that figure could be twice as large…

GILBERT: Not helped by Labor though, surely? You're not even supporting changes you proposed in government.

LEIGH: Most of the blow out in Joe Hockey's deficit is going to be due to decisions by Joe Hockey. I pointed before to the scrapping of the carbon price, giving the billion dollars back to multinationals, but in addition there's the notion that now might be the right time to change fair parental leave scheme to an unfair parental leave scheme that gives $50,000 to millionaire families when they have a child. I think that's the wrong set of priorities for Australia in fairness terms but also if you want to bring Australia back to surplus.

GILBERT: Alright, just finally, on that issue of conceding that structural changes have to be made, do you concede that?

LEIGH: We're always looking for structural savings Kieran.

GILBERT: How fundamental is this challenge though? If you listen to Chris Richardson, our political leaders don't get it – that's his point.

LEIGH: That's simply not right. I'd point you to the means testing that occurred under Labor, private health insurance rebate, scaling back the Baby Bonus, the Dependent Spouse Tax Offset. All tough decisions, all opposed by the other side. But all structural budget saves for the future, and fair ones, unlike the unfair ones which are at the heart of the budget.

GILBERT: This mid-year economic update is going to be pivotal now for Hockey to reboot the message.

CHESTER: Absolutely, the Labor Party wants to talk about fairness, what I think is fundamentally not fair is they saddled Australian families with $25,000 per person in debt and we're going to have to pay it back in a billion dollars per month in interest, that's not fair.

GILBERT: Darren Chester, Andrew Leigh; thanks so much. It's the end of Movember, so well done.

CHESTER: Three hours to go!

GILBERT: You're going to be judged this morning by Bronwyn Bishop.

CHESTER: Yes, then they come off. All three of the mos come off.

LEIGH: Much as I love Graham Perrett, it's hard for me to see how you're not going to win.